Given the startup boom, multinationals foraying into Indian markets and large-scale domestic companies on an expansion spree, there has been a huge demand in the office spaces. In fact, according to a report, India absorbed more than 42 million sq ft office space in 2017!

The momentum has spilled over to 2018. A research study revealed that the first quarter (Jan-March) of this year witnessed 23% year-on-year rise in office spaces. The Pan-India absorption stood at 11.4 million sq ft which is a 25% jump for the same period last year. The demand was primarily driven by companies operating in e-commerce, technology, engineering & manufacturing and BFSI domains.

The first quarter of every year usually experiences slow down in the office space demand as the companies are tied up in the year-end activities. Surprisingly, this year was a deviation from the norm.

Obviously, the office space sellers and lessors banked on the opportunity. So, as the demand soared, so did the rentals. Among the top ten micro-markets that registered highest rental values in 11-26% range, six were alone in Bengaluru! The spaces in Delhi-NCR, Hyderabad and Kolkata were not far behind.

Here is a breakdown of ten office micro-markets with highest rental growth in the first quarter of 2018:

1. Bengaluru – Bannerghatta Road (26%)

2. Bengaluru – Central Business District (25%)

3. Bengaluru – Electronic City (17.6%)

4. Bengaluru – Secondary Business District (14.3%)

5. Bengaluru – Outer Ring Road (12.7%)

6. Bengaluru – EPIP/Whitefield (11.1%)

7. Delhi – Aerocity (11.8%)

8. Delhi – Central Business District (10.8%)

9. Hyderabad – Secondary Business District (10.7%)

10. Kolkata – Sector V (14%)

The demand for office spaces is only expected to surge further as the Indian economy shows promising signs of growth. It is estimated that India’s economy will grow by 4.9% every year between the period 2016 and 2050 and may even overtake that of the US by 2040.

Hopefully, it should be a win-win situation for both office space buyers and sellers.